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Patel Promises Action On High Airfares Within 7 Days

Mumbai/New Delhi, Dec 4: In a firm message to airlines insisting on massive fare hikes, government today promised "corrective action" within a week even as DGCA met representatives of low cost airlines and asked them
PTI December 04, 2010 22:30 IST
PTI
Mumbai/New Delhi, Dec 4: In a firm message to airlines insisting on massive fare hikes, government today promised "corrective action" within a week even as DGCA met representatives of low cost airlines and asked them to show some reasonableness in ticket pricing.

"I am sure that within a week you will find corrective action being taken," Patel told reporters in Mumbai.

In case the airlines fail to take remedial action , the Directorate General of Civil Aviation (DGCA) was empowered to take decisions that would benefit air travellers.

"The regulator is not helpless. It should not be presumed that the regulator cannot take action. I am sure they can and they will when the situation warrants," the Minister said.

Patel had earlier said that neither exorbitant fares nor "predatory fares" (deliberate lowering of ticket prices below the actual costs to out compete other airlines) would not be allowed.

In Delhi, Top executives of three low cost airlines -- Spicejet, Indigo and GoAir -- were called for discussions on the issue by Director General of Civil Aviation E K Bharat Bhushan.

"The whole purpose is to ensure that there is some reasonableness about the fares," Bhushan, who was appointed to the post only yesterday, told reporters after the meeting.

He said he has called representatives of full service airlines -- Air India, Jet Airways and Kingfisher Airlines -- for discussions on Monday.

The airlines' proposal of kilometre-based fare slabs was rejected earlier this week by the Civil Aviation Ministry which maintained there was "no justification" for fare hike in an "arbitrary manner".

As per the proposals, the airfares were quoted by the airlines for four distance slabs of less than 750 km, 750- 1,000 km, 1,000-1,400 km and beyond 1,400 km.

Under it, a passenger buying an economy class ticket closer to the travel date may have to shell out Rs 10,500 for a Delhi-Chandigarh or Chennai-Coimbatore flight and anything upto Rs 40,000 on the Delhi-Bangalore or Delhi-Kolkata route.

The airlines have 'bucket fares' which mean there are certain number seats reserved in each flight at low fares that can be booked much in advance. As soon as these number of seats are filled, the fares grow progressively to a higher bucket closer to the date of travel.

Bhushan said the DGCA was trying to bring some reasonableness in the pricing issue and wanted the process to be transparent to enable the consumer to make an informed choice.

"We would like to have these bucket fares and are trying to understand what the problems are," he said.

There was an extraordinary hike in fares during the Diwali vacation and the government has been making efforts to ensure that the same is not repeated during Christmas," Patel had said.

In Bangalore, Kinghfisher Airlines Chairman Vijay Mallya lashed out at DGCA's attempts to rein in the prices and wanted the government to cut the "excessive" sales tax on the Aviation Turbine Fuel (ATF).

"Why should government regulate anything in an era of deregulation and competition," he asked.

"An airlines seat is a perishable commodity. It is dictated by demand and supply. Dynamic pricing is practiced all over the world by every airline without exception. I do not understand why we are making a song and dance of it in India," Mallya said. PTI